The second month of declining machinery orders from Japan leaves business cautious about spending. In Japan, machinery orders are considered an accurate indicator of upcoming business investment. According to the Japanese government, Japanese machinery orders dropped by 1.4 percent to 8.9 billion dollars. This is the second month of declining orders.
The Japanese economy is suffering due to the strong yen and uncertainties about the world economy. Export demand has declined due to slower growth in major foreign markets. Current government statistics indicate minimal economic growth, or perhaps even economic decline for the next few months. Chiwoong Lee, a Goldman Sachs economist, said that “The recovery in capital expenditures continues to be slow.”
Takashi Wada, a Cabinet Office officail, noted that there are danger signals. He said that “Although we maintained the assessment that says they are ‘picking up,’ it is not that we are see bright prospects.”